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Guggenheim v. City of Goleta

Federal Court Upholds City Mobile Home Rent Control Ordinance

The City of Goleta, California issued an ordinance protecting mobile home owners from excessive rate hikes/fees for rental of the land on which their homes are placed. Owners of a mobile home park sued, but echoing arguments in AARP’s brief, a federal appeals court upheld the ordinance.

Background

California is experiencing a severe housing shortage that, according to the state legislature, threatens the state’s economy, environment, and quality of life. The legislature enacted a comprehensive set of planning and housing laws that obligated local governments to adopt planning and zoning policies that help preserve existing sources of affordable housing. While the law did not impose rent control measures on mobile home parks per se, it did permit local jurisdictions to adopt rent control ordinances in specific recognition of the unique nature of mobile home parks and the residents’ vulnerability to rent increases.

Goleta enacted a variety of policies and programs directed at maintaining and creating affordable housing, among them an ordinance providing for rent control and vacancy control at mobile home parks intended to protect mobile homeowners from “rapidly rising and exorbitant rents” and preserve “the substantial investment of mobilehome owners in such homes.” Owners of mobile home parks sued.

The Litigation

Attorneys with AARP Foundation Litigation filed AARP’s “friend of the court” brief along with four other organizations that advocate for people with low incomes and one private law firm. The brief documented the extreme difficulty of finding affordable housing in California and cited studies documenting the critical importance of mobile home housing in helping low and lower-income families meet their housing needs.

The brief also compared the investments mobile home park owners versus mobile homeowners  make, and the tremendous rate of return park owners experience in an uncontrolled situation. The brief pointed out that park owners in this lawsuit testified that without rent and vacancy controls, rents for mobile home spaces in Goleta would be nearly five times the costs they are under the rent control ordinance, providing an annual rate of return exceeding 40% of park owners’ investments.

A federal appeals court upheld the ordinance, noting that the Guggenheims suffered no injury in the enactment of the ordinance since they purchased the land knowing of the restriction. “The people who really do have investment-backed expectations that might be upset by changes in the rent control system are tenants who bought their mobile homes after rent control went into effect,” wrote the court. “Ending rent control would be a windfall to the Guggenheims, and a disaster for [those] tenants.”

What’s at Stake

There are approximately 370,000 mobile homes in mobile home parks in California. Families living in these homes tend to be those with very low incomes (consequently with few housing options) and a substantial share of them are elderly. AARP has participated in numerous other cases seeking to protect mobile home owners from excessive rate hikes.

Status

Guggenheim v. City of Goleta was decided by the U.S. Court of Appeals for the Ninth Circuit

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